Buying a house in south of France

Buying a house in south of France

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Mario149

Original Poster:

7,750 posts

177 months

Friday 16th January 2015
quotequote all
Morning all, my mother currently lives in a lovely little village in the hills just outside of Nice but due to her age is now looking to come back to the UK where things are a bit more convenient. She has the property on the market however the estate agent appears to be rather useless (we can't see the property advertised on any UK sites).

It occurred to me that there might be an option whereby I could potentially buy the property from her to rent as an investment, and she'd still have money to buy here. I was originally going to top her up with £50k on top of her sale price to help her buy a house in the UK, but my thinking is that given the massive estate agent fees etc in France, by doing a private sale whereby I use the £50k as a deposit and get a mortgage to buy her place, she might actually get close to saving the £50k i.e. still have the same amount to spend in the UK as she would have if she sold to a 3rd party and I topped her up as planned. Her house is up for EUR400k (so ~£310k). This is it:

http://www.wretmanestate.com/en/buy/sale-village-h...

A few queries:

1) does this sound bonkers?!
2) will a UK bank lend to buy a foreign property easily?
3) how easy is it to rent a property in France out from another country?
4) is this the sort of house that will rent, or is it too big/doesn't provide a good percentage return?

I'm just trying to gauge possibilities initially.

censored

ETA

Sorry not allowed, turn this thread into an advert and it will be removed.

Edited by Big Al. on Friday 16th January 17:21

SimonV8ster

12,543 posts

227 months

Friday 16th January 2015
quotequote all
I think i'd have a one to one with the agent..........

v8250

2,724 posts

210 months

Friday 16th January 2015
quotequote all
No, this does not sound bonkers. Immobilier fees in France are ridiculous. Renting the property makes perfect sense, but you need to be careful on your tax position, French Gov't has a penchant for taxation revenues, as I'm sure you're aware. Renting a property from the UK is perfectly do-able though may be quite hard work at times. Do you know the AngloInfo website? There may be some good contacts on there for you http://riviera.angloinfo.com/ place the same Q?'s to this forum. Before doing anything you need to run the financial's properly and understand your tax position.

Oh, and it is the SoF...so beware of crooks wink


NormalWisdom

2,139 posts

158 months

Friday 16th January 2015
quotequote all
SimonV8ster said:
I think i'd have a one to one with the agent..........
Seconded (having seen her picture on the EA's website biggrin )

Mario149

Original Poster:

7,750 posts

177 months

Friday 16th January 2015
quotequote all
NormalWisdom said:
SimonV8ster said:
I think i'd have a one to one with the agent..........
Seconded (having seen her picture on the EA's website biggrin )
hehe

Mario149

Original Poster:

7,750 posts

177 months

Friday 16th January 2015
quotequote all
anonymous said:
[redacted]
SA?

It is actually a very nice house, probably one of the nicest in the village. You can't really take pics of the outside as it's down a narrow street and on the other side of the house the hill drops away. Inside is great, definitely characterful. Fireplace works and all. It does need a bathroom on the top floor which you could put in.

Bluebarge

4,519 posts

177 months

Friday 16th January 2015
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The property market in France is dead. Deflation means there is no advantage to buying now. It looks cute, but google maps shows it to be perched above a big industrial estate. I assume it takes a little while to reach the coast and, once there, parking in high season will be difficult. France is in political turmoil - taxes will not go down easily; there is a possibility of a FN victory in the Presidential elections.

In other words, there is a lot of property out there, this is a market sector which will not attract the wealthy overseas investor who is immune to adverse economic climates and it is not in an area which has any particular advantage over staying nearer to the coast, or moving further into the mountains.

So, by all means buy it, but don't expect it to appreciate in price anytime soon and don't expect miracles of the agent.

magooagain

9,908 posts

169 months

Friday 16th January 2015
quotequote all
As above the property market is on the floor here. All though i dont know that area that well.

If you buy it you may have a nice holiday home with an ocassional rent out.
If you needed to make money from it to pay a mortage then expect a world of of pain.

You can buy from your mother by just using a notaire,an estate agent is not needed and you are not obliged to use that one that is trying to sell the house.

Taxes will need to be paid though plus notaire fee. But still cheaper than using an agent.

Get your mum to sell if she can. That leaves you free to have more choice.

Mario149

Original Poster:

7,750 posts

177 months

Friday 16th January 2015
quotequote all
Thanks for the info. With regards to location, it's about 25 mins from the beach, and about 1.5 hours from skiing. The industrial estate is below the hill, about 700m vertically below and not in view so it's not an eyesore.

In terms of paying the mortgage, a quick calculation suggests that it would cost between £1200 (25 years) and £1800 (15 years) pcm, which even if there is not rental income is perfectly doable as I don't have a mortgage to pay here in the UK and already own a couple of places.

The 2 options would be:
1) try and rent it long term to French people and cover as much of the mortgage and upkeep as possible
2) try and rent it for holiday lets and use it as a holiday home occasionally ourselves and accept that it will likely cost us

With (1) I guess the question is whether there is a market for renting what is really quite a big place, and with (2) whether we'll get VFM in terms of it as a holiday home.

What worries me a bit is the possibility of it losing value and/or us being slapped with some extra taxes due to being foreign and a bit monied.

A common lawyer

319 posts

127 months

Thursday 22nd January 2015
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I know nothing about that market, but plenty about managing at a distance. I'd be very cautious. Short lets are a nightmare, cleaning and keys and whatnot. I don't know how much time you're planning to spend there, but I don't like other people staying in "my" house. Long lets can be great, but if the tenant ever decides to stop paying, you will have problems. There is landlord's insurance to cover this, but that affects profitability. If you want to leave profitability to one side to help your mum out, and you like the idea of having your own place down there, then that's a different matter!

If you don't have an exclusive mandate with the agent, then get it on leboncoin, pap.fr, angloinfo, etc etc and shift it yourself. If you're asking 400k, it could be a 20k saving in fees. How would you show the place?

Welshbeef

49,633 posts

197 months

Thursday 22nd January 2015
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Given the ECB today at 1:30pm are likely to announce a huge QE the Euro will decrease significantly against the £. So wait to see what happens plus it may continue so things will get cheaper to buy for us in the UK.

I'd highly recommend that you always borrow in the same currency as the asset you are purchasing. Different cut reconciles could work in your favour but equally could not and cost you a fortune more. You and most people are not currency speculators so go the sensible low risk option.




As for the taxation side you'll need an expert in French tax. If in the UK you'd have to ensure she paid market rent you couldn't subsidise it else you have issues with Inheritance tax.

thefrog

341 posts

218 months

Thursday 22nd January 2015
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Also bear in mind that long term rent contracts (bail) in France is not in the landlord's favour. You typically have to agree to a 3/6/9 year lease, with very little options to get out unless you sell, die, etc... the tenant on the other hand can give you a month's notice. You can't just waltz in and say here's a month's notice, I found someone who's prepared to pay more rent, you get the picture.


bosshog

1,574 posts

275 months

Thursday 26th February 2015
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I have 2 flats in the area (I lived there for 16 years). Its very hard to manage from the UK and you need someone on the ground. As a landlord you have zero rights - all the rights are with the tenant. You cannot kick them out in winter (Oct->April) even if they pay you no rent and reck the place - you will be liable to go to jail for 3 years if you do. If you rent it , you will need to pay income tax (after costs) and social charges on the total revenue. For example for a revenue of 5000€ you will have about 2000€ plus you will have Tax habiation which depending on the size will probably be around 1500€ year.

We are now trying to sell. The market is not great, everyone wants a bargen - people are buying though - we've had plenty of sh*ty offers several 10K's below what we paid 10 years ago.

Tread very carefully.

Mario149

Original Poster:

7,750 posts

177 months

Thursday 26th February 2015
quotequote all
Thanks for the info. We've decided to go down a different route now. I'm just going to buy her a property here in the UK and she's going to sell up without any time pressure. The whole rental issue and zero rights thing really put us off, seems a wonder to me that people bother to rent properties out at all in France. Still, doesn't appear to be as bad as the Netherlands where apparently the local council (or similar) tells you what you're allowed to rent your place out for!!